Stress affects us all in different ways. It’s nasty. Regardless of how you experience stress, having money problems only amplifies it. The good news, we can do something about those money problems.
Wealthy (healthy) living is something I think most of us would agree is important. Reducing stress levels while improving mental and physical health has obvious benefits. But what does financial planning have to do with it, and how can it improve the quality of our lives?
Let’s start with the benefits of living a healthy life: we feel good, we’re happy, we’re active, we live longer, we enjoy life, etc. But, let’s face it, life happens. Work, family, money, and health issues can be strong headwinds to living a healthy life, and stress from work can affect your attitude outside the office. Not sleeping enough because you are raising a family, worrying about bills, and simply just trying to manage it all is difficult to say the least.
Unfortunately, there really isn’t a formal education when it comes to money in our society. If you’re like most people, you probably learned your money habits (good and bad) from your parents, and now most likely are passing it on to your kids. The problem of no financial education continues in perpetuity. Sure, you learned how to balance a checkbook and open up a bank account, but we don’t even need to do those things in person anymore. Technology has made things easier for us, but also removed us further from our money. We have less of a respect and relationship with money since technology is our intermediary instead of physically writing checks, balancing our accounts, etc. Given the cultural norm that “we don’t talk about money” has persisted for decades, getting less personal with our money is not necessarily a good thing.
It has been my experience that most people tend to get stressed mentally when they feel things are out of their control. This can lead to poor physical health, whether that means you have a poor diet, don’t exercise, or work way too many hours. It’s interesting to note that money is intangible, unlike other stressors in our life, yet it can be the biggest source of stress for us. So how does financial planning help restore order and, thus, health?
First, let me remind you what financial planning actually is as most people and advisors are doing it wrong. Financial planning has nothing to do with rates of return, asset allocation, fees, products, etc. Financial planning is a process. A process that results in a simple written plan to hold your financial decisions accountable to. To be more clear, consider the following:
• This process assesses your current financial situation and whether or not you are on track to achieve your goals.
• This process tests a variety of alternative options that can help you get where you want faster and with less risk.
• This process can bring order to an otherwise chaotic financial life.
Going through the financial planning process should be simple and straight forward without a sales pitch at the end. Done correctly, it’s a way to look at your financial life in detail, but, more importantly, how your financial life impacts the rest of your nonfinancial life. Identify your hopes, dreams, and goals and then work to structure your finances to get what you want.
How does this improve your mental and physical health? Because it provides order. Most of us don’t work for money itself, we work for money because we use it as a tool to do the things we want—to provide a home for our families, travel, education for our kids, the list goes on. When we work but don’t get what we want, we get stressed. This stress can lead to the deterioration of our mental and physical health.
When I see a client take a deep breath, exhale, and relax their shoulders as they see how it all fits together, I can feel their stress level go down. It’s one of my favorite things in working with people—seeing them figure it out with a plan to make it all happen. Only once this happens do all the more granular things (strategies, products, fees, etc.) become important.
Is financial planning the only way to reduce stress and improve your health? No. But, when done correctly as part of other healthy living decisions, it certainly can improve the quality of your life. Where should you start? It has been my experience that the best financial planning is done by sitting with your loved ones and talking about your hopes, dreams, and goals for the future. This is what we all want to talk about anyway. Crystalizing what you want will make the rest of the financial planning process much easier, and, dare I say, actually fun!
Here’s to less stress, my friends.
Derek Notman is a Certified Financial Planner® and Founder of Intrepid Wealth Partners LLC. intrepidwealthpartners.com